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It’s a sad but very common story in the northern suburbs: parents, often with sizable estates, die and leave behind a sizable inheritance for their children.

Usually this entails a diverse portfolio of assets ranging from stocks and bonds to an entire family business.

While the loss of a loved one is tragic enough by itself, such a transfer of wealth can become even more difficult if there are multiple recipients involved or if there’s a question about what all the assets are actually worth.

Hard assets can be precious artwork, jewelry or fancy automobiles. But perhaps the most common asset for parents to pass along — and the most difficult to value — is real estate.

“I can value IBM stock down to the penny, but can they tell you what the value of my house is?” asks Peter Lang, managing director of Hightower Strata Wealth Management in Harrison. “It’s pretty complicated. ... Any type of hard asset is hard to value.”

His company provides what he calls “holistic” wealth management services that assist will executors in all aspects of managing the complexities and nuances of the responsibility.

When a child is suddenly thrust into the role of executor, it can be incredibly overwhelming.

Lang says that in addition to mastering all the aspects of an estate — judging and often juggling the opinions of lawyers, accountants and appraisers — the one with the responsibility will also have to handle his or her own family members, who might also be in line for a share of the inheritance.

“Usually a parent chooses a child and hopefully that child will have enough common sense to hire counsel and follow their advice,” says Lang, who recently co-authored a white paper on this topic, and in it he repeatedly stresses the need for professional assistance.

Transferring an estate is complicated under the best of circumstances. They are regulated by federal policies and, sometimes, multiple state jurisdictions as well.

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Plus, there’s a clock running. An estate tax return with all the valuations needs to be submitted to the U.S. Internal Revenue Service within nine months of the “death date,” the day that the leaver of the inheritance passed away.

Then, the IRS takes nine months or more to accept or reject it.

“Estates can linger for years,” Lang says.

The valuation game

One of the trickiest aspects to an estate is determining the value of the real estate that’s being passed down to the next generation.

Because hard assets are technically only worth what someone will pay for them, it’s impossible to put a price tag on something that doesn’t have a buyer.

“It could be artwork, could be any hard asset — it’s subject to appraisal,” Lang says.

Those appraisals can easily be disputed though, and with real estate the economic grounds become even more murky because an appraiser is trying to determine the value of the estate at the exact moment of the former owner’s death.

It’s not as simple as looking up what the property was bought for and then adjusting for inflation.

Appraisers must research the local market and find what people were paying for similar properties at that time in that area.

Even with that basic research, it’s not an exact science.

Each property is different, and in the higher-end communities of the Lower Hudson Valley those seemingly subtle differences could be worth hundreds of thousands of dollars for the surviving children.

It’s a much more complex process than calculating the value of a mutual fund.

“Liquid assets like cash and stocks are specific and can’t be disputed,” Lang says. “It’s a matter of throwing it up on a spreadsheet. ... It’s easy.”

Once the death-date value is determined and accepted by the IRS, that amount is basically just a starting point for the estate — which could then be followed by the payment of estate taxes.

If the agreed upon “starting point” value is $1 million, and the house then sells for $1.5 million, that’s a capital gain of $500,000 that would be subject to its own form of taxes. If it sells for $500,000, then that would be a $500,000 loss incurred by the estate, which could trigger some tax benefits.

In a down real estate market, such as the one we’re in now, estates can sit on the market for years — all while the professionals continue to get paid.